EXHIBIT NO. 10.5
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
RESEARCH COLLABORATION AND LICENSE AGREEMENT
between
MERCK FROSST CANADA & CO.,
And
NITROMED, INC.
RESEARCH COLLABORATION AND LICENSE AGREEMENT
THIS AGREEMENT effective as of the date of last signature (the "Effective Date")
between MERCK FROSST CANADA & CO., a corporate entity existing pursuant to the
laws of Nova Scotia ("MERCK") a wholly-owned subsidiary of Merck & Co., Inc., a
corporation organized and existing under the laws of New Jersey and NITROMED,
INC., a corporation organized and existing under the laws of Delaware
("NITROMED").
WITNESSETH:
WHEREAS, NITROMED has developed NITROMED Know-How (as hereinafter
defined) and has rights to Patent Rights (as hereinafter defined);
WHEREAS, MERCK and NITROMED desire to enter into a research
collaboration to develop Licensed Products (as hereinafter defined) upon the
terms and conditions set forth herein;
WHEREAS, MERCK desires to obtain a license under the Patent Rights and
NITROMED Know-How, upon the terms and conditions set forth herein and NITROMED
desires to grant such a license;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless specifically set forth to the contrary herein, the following
terms, whether used in the singular or plural, shall have the respective
meanings set forth below:
1.1 The term "Affiliate" shall mean (i) any corporation or business entity
of which fifty percent (50%) or more of the securities or other
ownership interests representing the equity, the voting stock or
general partnership interest are owned, controlled or held, directly or
indirectly, by MERCK or NITROMED; or (ii) any corporation or business
entity which, directly or indirectly, owns, controls or holds fifty
percent (50%) (or the maximum ownership interest permitted by law) or
more of the securities or other ownership interests representing the
equity, the voting stock or, if applicable, the general partnership
interest, of MERCK or NITROMED.
1.2 The term "Calendar Quarter" shall mean the respective periods of three
(3) consecutive calendar months ending on March 31, June 30, September
30 and December 31.
1.3 The term "Calendar Year" shall mean each successive period of twelve
(12) months commencing on January 1 and ending on December 31.
1.4 The term "Change of Control" shall mean the occurrence of any of the
following:
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(a) An acquisition of any voting securities of NITROMED (the
"Voting Securities") by any "Person" (as the term "person" is
used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")),
immediately after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than fifty percent (50%) of the combined
voting power of NITROMED's then-outstanding Voting Securities;
or
(b) The consummation of:
(i) A merger, consolidation or reorganization (1) with or
into NITROMED or a direct or indirect subsidiary of
NITROMED or (2) in which securities of NITROMED are
issued (a "Merger"), unless such Merger is a
"Non-Control Transaction." A "Non-Control
Transaction" shall mean a Merger in which the
stockholders of NITROMED immediately before such
Merger own directly or indirectly immediately
following such Merger at least fifty percent (50%) of
the combined voting power of the outstanding voting
securities of (x) the surviving corporation, if there
is no parent corporation or (y) if there is one or
more than one parent corporation, the ultimate parent
corporation;
(ii) A complete liquidation or dissolution of NITROMED; or
(iii) The sale or other disposition of all or substantially
all of the assets of NITROMED and its Affiliates
taken as a whole to any Person.
Notwithstanding the foregoing, for purposes of subsection (a), (b)(i)
and (iii) above, a Change of Control shall be deemed to exist only if
the acquiror (together with any of its affiliates), in its most
recently completed fiscal year, had total sales of pharmaceutical
products in excess of [**] dollars ($[**]).
1.5 The term "Combination Product" shall mean a Licensed Product that
includes [**].
1.6 The term "Commercially Reasonable Efforts" shall mean with respect to
the efforts to be expended by a Party with respect to any objective,
reasonable, diligent, good faith efforts to accomplish such objective
as such Party would normally use to accomplish a similar objective
under similar circumstances, it being understood and agreed that with
respect to the research, development or commercialization of any
NO-Enhanced ▇▇▇-2 Compound or Licensed Product, such efforts shall be
substantially equivalent to those efforts and resources commonly used
by a Party for a product owned by it or to which it has rights, which
product is at a similar stage in its development or product life and is
of similar market potential taking into account efficacy, safety,
approved labeling, the competitiveness of alternative products in the
marketplace, the patent and other proprietary position of the product,
the likelihood of regulatory approval given the regulatory structure
involved, the profitability of the product including the royalties
payable to licensors of patent or other intellectual property rights,
alternative products and other relevant factors. Commercially
Reasonable Efforts shall be determined on a
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market-by-market and indication-by-indication basis for a particular
product, and it is anticipated that the level of effort will change
over time, reflecting changes in the status of the Licensed Product and
the market(s) involved.
1.7 The term "Committee" shall mean the joint research and development
committee described in Section 2.4.1.
1.8 The term "Competitive Product" shall mean product(s) containing the
same active ingredient(s) as the Licensed Product would be considered
substitutable for Licensed Product and [**] as measured by
prescriptions or other similar information in the country of sale.
1.9 The term "Control" shall mean with respect to any (a) item of
information, including, without limitation, NITROMED Know-How, or (b)
intellectual property right, the possession (whether by ownership in
whole or in part or license, other than pursuant to this Agreement) by
a Party of the ability to grant to the other Party access and/or a
license as provided herein under such item or right without violating
the terms of any agreement or other arrangements with any Third Party.
1.10 The term "▇▇▇-2 Compound" shall mean any compound that [**] as measured
in the human whole blood assays as described in ▇▇▇▇▇▇▇ et al., Inflamm
Res 45:68-74 (1996).
1.11 The term "Development Work" shall mean preclinical and clinical drug
development activities, including test method development and stability
testing, toxicology, formulation, quality assurance/quality control
development, statistical analysis, clinical studies and regulatory
affairs, product approval and registration.
1.12 The term "Field" shall mean [**].
1.13 The term "First Commercial Sale" shall mean, with respect to any
Licensed Product, the first sale for end use or consumption of such
Licensed Product in a country after all required approvals, excluding
pricing approvals, have been granted by the governing health authority
of such country.
1.14 The term "Full Time Equivalent" or "FTE" shall mean the equivalent of a
full-time scientist's work time over a twelve-month period (including
normal vacations, sick days and holidays). The portion of an FTE year
devoted by a scientist to the Research Program shall be determined by
dividing the number of days during any twelve (12) month period devoted
by such employee to the Research Program by the total number of working
days during such twelve-month period.
1.15 The term "FTE Rate" shall mean [**] dollars ($[**]) per FTE. The FTE
Rate shall include all personnel, equipment, reagents and all other
expenses including support staff and overhead for or associated with an
FTE.
1.16 The term "Improvement" shall mean any enhancement in the manufacture,
formulation, ingredients, preparation, presentation, means of delivery,
dosage or packaging of the Licensed Product.
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1.17 The term "Indication" shall mean the use in the treatment and/or
prevention of diseases, conditions or disorders involving each of [**].
1.18 The term "Joint Information and Inventions" shall have the meaning set
forth in Section 2.7.
1.19 The term "Licensed Product(s)" shall mean preparations in final form,
either as a fixed combination or intended for concomitant
administration, for sale by prescription, over-the-counter or any other
method for all uses in the Field, which contain a NO-Enhanced ▇▇▇-2
Compound including, without limitation, any Combination Product.
1.20 The term "Major European Market" shall mean any one of the following
countries: the United Kingdom, France, Germany, Italy or Spain.
1.21 The term "Major Market" shall mean any one of the following countries:
United States, Japan, the United Kingdom, France, Germany, Italy or
Spain.
1.22 The term "Marketing Approval" shall mean any and all approvals
(including price and reimbursement approvals), licenses, registrations,
or authorizations of the European Union or any country, federal, state
or local regulatory agency, department, bureau or other government
entity that is necessary for the manufacture, use, storage, import,
transport and/or sale of a Licensed Product for human use in such
jurisdiction and following which the Licensed Product may be legally
sold in such jurisdiction.
1.23 The term "MERCK Information and Inventions" shall have the meaning set
forth in Section 2.7.
1.24 The term "MERCK Know-How" shall mean all secret, substantial and
identified information and materials, including but not limited to,
discoveries, Improvements, processes, formulas, data, inventions,
know-how and trade secrets, patentable or otherwise, which, during the
Research Program Term, are (i) Controlled by MERCK, (ii) are not
generally known, and (iii) in MERCK's reasonable opinion are required
by NITROMED in the performance of its obligations under the Research
Program.
1.25 The term "NDA" shall mean a New Drug Application and all amendments and
supplements thereto filed with the FDA (as more fully defined in 21 CFR
314.5 et seq.), or the equivalent application filed with any equivalent
agency or governmental authority outside the United States (including
any supra-national agency such as in the European Union) requiring such
filing, including all documents, data, and other information concerning
a pharmaceutical product which are necessary for gaining regulatory
approval to market and sell such pharmaceutical product.
1.26 The term "Net Sales" shall mean the gross invoice price of Licensed
Product sold by MERCK, its affiliates or sublicensees (which term does
not include distributors which are not Affiliates of MERCK, its
Affiliates or sublicensees) to a Third Party after deducting, if not
previously deducted, in the amount invoiced or received:
(a) trade and quantity discounts;
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(b) returns, rebates and allowances;
(c) chargebacks and other amounts paid on sale or dispensing of
Licensed Product;
(d) retroactive price reductions that are actually allowed or
granted;
(e) a fixed amount equal to three percent (3%) of the amount
invoiced to cover bad debt, sales or excise taxes, early
payment cash discounts, and additional special transportation,
custom duties, and other governmental charges; and
(f) the standard inventory cost of devices or delivery systems
used for dispensing or administering Licensed Product which
accompany Licensed Product as it is sold.
In the case of any sale of the Licensed Product(s) for consideration
other than cash, such as barter or countertrade, Net Sales shall be
calculated on the fair market value of the consideration received. In
the event the Licensed Product is sold as part of a Combination
Product, the Net Sales from the Combination Product, for the purposes
of determining royalty payments, shall be determined by multiplying the
Net Sales of the Combination Product during the applicable royalty
reporting period, by the fraction, A/A+B, where A is the average sale
price of the Licensed Product when sold separately in finished form and
B is the average sale price of the other product(s) included in the
Combination Product when sold separately in finished form, in each case
during the applicable royalty reporting period or, if sales of both the
Licensed Product and the other product(s) did not occur in such period,
then in the most recent royalty reporting period in which sales of both
occurred. In the event that such average sale price cannot be
determined for both the Licensed Product and all other products(s)
included in the Combination Product, Net Sales for the purposes of
determining royalty payments shall be calculated by multiplying the Net
Sales of the Combination Product by the fraction of C/C+D where C is
the fair market value of the Licensed Product and D is the fair market
value of all other pharmaceutical product(s) included in the
Combination Product. In such event, MERCK shall in good faith make a
determination of the respective fair market values of the Licensed
Product and all other pharmaceutical products included in the
Combination Product, and shall notify NITROMED of such determination
and provide NITROMED with data to support such determination. NITROMED
shall have the right to review such determination and supporting data,
and to notify MERCK if it disagrees with such determination. If
NITROMED does not agree with such determination and if the Parties are
unable to agree in good faith as to such respective fair market values,
then such matter shall be resolved in accordance with Section 9.6.
1.27 The term "NITROMED Indemnified Parties" shall have the meaning set
forth in Section 6.4.
1.28 The term "NITROMED Information and Inventions" shall have the meaning
set forth in Section 2.7.
1.29 The term "NITROMED Know-How" shall mean all secret, substantial and
identified information and materials, including but not limited to,
discoveries, Improvements, processes, formulas, data, inventions,
know-how and trade secrets, patentable or
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otherwise, which during the Research Program Term (i) are Controlled by
NITROMED , (ii) are not generally known and (iii) are reasonably
necessary or useful to MERCK in connection with the Research Program
within the Field or the research, development, manufacture, marketing,
use of sale of Licensed Products in the Territory.
1.30 The term "NO" shall mean nitric oxide.
1.31 The term "NO-Enhanced ▇▇▇-2 Compound" shall mean [**].
1.32 The term "NO-▇▇▇-2 Compound" shall mean [**].
1.33 The term "NO-donor" shall mean [**].
1.34 The term "Other Indication" shall mean the use in the treatment and/or
prevention of diseases, conditions or disorders other than the
categories (i), (ii) and (iii) in Section 1.17 or those specifically
set out therein.
1.35 The term "Party" shall mean MERCK or NITROMED; "Parties" shall mean
MERCK OR NITROMED. As used in this Agreement, references to Third
Parties do not include a Party or its Affiliates.
1.36 The term "Patent Rights" shall mean any and all patents and patent
applications in the Territory (which for the purposes of this Agreement
shall be deemed to include certificates of invention and applications
for certificates of invention) which during the Research Program Term
and for one (1) year thereafter are Controlled by NITROMED, including,
but not limited to, those listed on Attachment 1.36, which: (i) claim,
cover or relate to NO-Enhanced ▇▇▇-2 Compounds or Licensed Products; or
(ii) are divisions, continuations, continuations-in-part, reissues,
renewals, extensions, supplementary protection certificates, utility,
models and the like of any such patents and patent applications and
foreign equivalents thereof.
1.37 The term "Phase I Studies" shall mean a human clinical trial in any
country that is intended to initially evaluate the safety and/or
pharmacological effect of a NO-Enhanced ▇▇▇-2 Compound or Licensed
Product in subjects or that would otherwise satisfy requirements of 21
CFR 312.21(a), or its foreign equivalent.
1.38 The term "Phase III Studies" shall mean a pivotal human clinical trial
in any country the results of which could be used to establish safety
and efficacy of a NO-Enhanced ▇▇▇-2 Compound or Licensed Product as a
basis for a NDA or that would otherwise satisfy requirements of 21 CFR
312.21(c), or its foreign equivalent.
1.39 The term "Project Leader" shall have the meaning set forth in Section
2.4.3.
1.40 The term "Proprietary Information" shall mean all MERCK Know-How,
NITROMED Know-How, and all other scientific, clinical, regulatory,
marketing, financial and commercial information or data, whether
communicated in writing or oral or by sensory detection, which is
provided by one Party to the other Party in connection with this
Agreement.
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1.41 The term "Research Information and Inventions" shall mean NITROMED
Information and Inventions, MERCK Information and Inventions and Joint
Information and Inventions.
1.42 The term "Research Plan" shall have the meaning set forth in Section
2.1.
1.43 The term "Research Program" means the collaborative research effort
between the Parties hereto to develop NO-Enhanced ▇▇▇-2 Compounds and
Licensed Products as set forth in Article II and Attachment 2.1.
1.44 The term "Research Program Term" shall have the meaning set forth in
Section 2.8.
1.45 The term "Royalty Period" shall have the meaning set forth in Section
5.4.1.
1.46 The term "Safety Assessment Candidate" or "SAC" shall mean a
NO-Enhanced ▇▇▇-2 Compound for human use with a scientific data package
that at MERCK's sole discretion is evaluated and approved by the Merck
Safety Assessment Review Committee or its successor as a development
candidate for safety testing prior to initiation of clinical trials.
1.47 The term "Status Notice" shall mean a notice provided by NITROMED to
MERCK that (a) requests that [**] MERCK with respect to a specific
[**]; (b) requests that [**] Merck with respect to [**] with respect to
a specified Indication or (c) requests that [**] MERCK with respect to
[**] that is not being pursued by MERCK (or on its behalf) and for
which NITROMED has [**] for conducting such research. For purpose of
this Section 1.47 a [**] must be based on data existing at the time any
such notice is provided.
1.48 The term "Territory" shall mean all of the countries in the world.
1.49 The term "Third Party(ies)" shall mean any person(s) or entity(ies)
other than MERCK, NITROMED or their respective Affiliates.
1.50 The term "Valid Patent Claim" means a claim of (a) any patent
application within the Territory included within Patent Rights and/or
Research Information and Inventions that has been pending less than six
(6) years from the earliest date on which such patent application
claims priority and such patent claim has not have been cancelled,
withdrawn or abandoned , or (b) an issued and unexpired patent included
within the Patent Rights and/or Research Information and Inventions,
which has not been revoked or held unenforceable or invalid by a
decision of a court or other governmental agency of competent
jurisdiction, unappealable or unappealed with the time allowed for
appeal, and which has not been disclaimed, denied or admitted to be
invalid or unenforceable through reissue or disclaimer or otherwise.
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ARTICLE II
RESEARCH PROGRAM
2.1 GENERAL. NITROMED and MERCK shall engage in the Research Program upon
the terms and conditions set forth in this Agreement. The activities to
be undertaken in the course of Research Program are set forth in the
"Research Plan" (Attachment 2.1) which may be amended from time to time
upon the mutual written agreement of the Parties.
2.2 NITROMED SPECIFIC RESPONSIBILITIES. Under the direction of the
Committee, NITROMED shall make available scientific and managerial
personnel with sufficient expertise and experience necessary to
undertake NITROMED's responsibilities, as set forth in the Research
Plan and in the following sentence. In particular, NITROMED shall
devote to the Research Program [**] FTEs for the [**] year of the
Research Program Term and [**] FTEs for the [**] year and [**] FTEs for
the [**] year of the Research Program Term, all of which shall be
funded by MERCK according to Section 5.1 hereof. It is understood that
the Parties through mutual agreement may increase the numbers of FTEs
devoted to the Research Program in the second and third years.
2.3 MERCK SPECIFIC RESPONSIBILITIES. MERCK shall be responsible for
performing all Development Work necessary to obtain Marketing Approvals
for Licensed Products in certain countries in the Territory pursuant to
MERCK's obligation under Section 3.4. NITROMED acknowledges and agrees
that MERCK may use its Affiliates or Third Parties to perform certain
of its obligations under this Agreement from time to time. MERCK shall,
during the Research Program Term, keep NITROMED advised of its
activities under this Section 2.3 through MERCK's Committee
representatives during each quarterly meeting, pursuant to Section
2.4.2.
2.4 COMMITTEE. The Parties hereby establish a Committee to facilitate the
Research Program as follows:
2.4.1 COMPOSITION OF THE COMMITTEE. The Research Program shall be conducted
under the direction of a joint research committee (the "Committee")
comprised of three (3) named representatives of MERCK and three (3)
named representatives of NITROMED. Each Party shall appoint its
respective representatives to the Committee from time to time, and may
substitute one or more of its representatives, in its sole discretion,
effective upon notice to the other Party of such change. These
representatives shall have appropriate technical credentials,
experience and knowledge, and ongoing familiarity with the Research
Program. Additional representatives or consultants may from time to
time, by mutual consent of the Parties, be invited to attend Committee
meetings, subject to compliance with Section 4.1. The Committee shall
be chaired by a representative of MERCK. Decisions of the Committee
shall be made by a majority of the members. In the event that the
Committee cannot or does not, after good faith efforts, reach agreement
on an issue within thirty (30) days after the issue is first referred
to it, such issue shall be referred for resolution to the Chief
Executive Officer (or a senior executive officer designated by such
CEO) of each Party. In the event such officers, after good faith
efforts, cannot come to a resolution, the resolution and/or course of
conduct shall be [**];
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provided, however, any such resolution and/or course of conduct shall
not be inconsistent with the provisions of this Agreement or impose any
obligation or burden [**] that is outside the scope of this Agreement.
Each Party shall bear its own expenses related to the attendance of
such meetings by its representatives.
2.4.2 MEETINGS. The Committee shall meet at least once each Calendar Quarter
with the location for such meetings alternating between NITROMED and
MERCK facilities (or such other locations as is determined by the
Committee). Alternatively, the Committee may meet by means of
teleconference, videoconference or other similar communications
equipment. The Committee shall confer regarding the status of the
Research Program, review relevant data, consider and advise on any
technical issues that arise, consider issues of priority, and review
and advise on any budgetary and economic matters relating to the
Research Program which is referred to the Committee.
2.4.3 PROJECT LEADERS. MERCK and NITROMED each shall appoint a person (a
"Project Leader") from the Committee to coordinate its part of the
Research Program. The Project Leaders shall be the primary contact
between the Parties with respect to the Research Program. Each Party
shall notify the other within thirty (30) days of the date of the
Agreement of the appointment of its Project Leader and shall notify the
other Party as soon as practicable upon changing this appointment.
2.5 EXCHANGE OF INFORMATION. Upon execution of this Agreement, NITROMED
shall disclose to MERCK in English and in writing all NITROMED Know-How
not previously disclosed. During the Research Project Term, NITROMED
shall also promptly disclose to MERCK in English and in writing on an
ongoing basis all NITROMED Know-How. Upon the execution of this
Agreement and on an ongoing basis during the Research Project Term,
MERCK shall promptly disclose to NITROMED all MERCK Know-How.
2.6 RECORDS AND REPORTS.
2.6.1 RECORDS. Each Party shall maintain records, in sufficient detail and in
good scientific manner appropriate for patent and regulatory purposes,
which shall fully and properly reflect all work done and results
achieved in the performance of the Research Program.
2.6.2 COPIES AND INSPECTION OF RECORDS. During the Research Program Term and
for a period of two (2) years thereafter, MERCK shall have the right,
during normal business hours and upon reasonable notice, to inspect and
copy all such records of NITROMED referred to in Section 2.6.1. MERCK
shall maintain such records and the information disclosed therein in
confidence in accordance with Section 4.1. During the Research Program
Term and for a period of two (2) years thereafter, MERCK shall have the
right to arrange for its employees and/or consultants involved in the
activities contemplated hereunder to visit NITROMED at its offices and
laboratories during normal business hours and upon reasonable notice,
and to discuss the Research Program work and its results in detail with
the technical personnel and consultants of NITROMED.
2.6.3 QUARTERLY REPORTS. Within thirty (30) days following the end of each
Calendar Quarter during the term of this Agreement, each Party shall
provide to the other Party a written
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progress report which shall describe (i) the work performed to date on
the Research Program, evaluate the work performed in relation to the
goals of the Research Program and provide such other information
required by the Research Program or reasonably requested by the other
Party relating to the progress of the goals or performance of the
Research Program, and (ii) the status of the Development Work
undertaken in the previous Calendar Quarter, PROVIDED THAT no further
reports under this Section 2.6.3 shall be required following either a
Change of Control or the First Commercial Sale of a Licensed Product
for each Indication in all Major Markets. Upon written request, each
Party shall provide to the other Party copies of the records described
in Section 2.6.1 above; provided however that Merck may in its
discretion make certain records available for inspection at its
facilities without an obligation to provide copies of such records to
NITROMED.
2.7 RESEARCH INFORMATION AND INVENTIONS. The entire right, title and
interest in all discoveries, Improvements, processes, formulas, data,
inventions, know-how and trade secrets, patentable or otherwise,
arising from the Research Program (all being "Research Information and
Inventions") developed or invented:
(a) solely by employees of NITROMED shall be owned solely by
NITROMED ("NITROMED Information and Inventions");
(b) solely by employees of MERCK shall be owned solely by MERCK
("MERCK Information and Inventions"); and
(c) jointly by employees of NITROMED and MERCK shall be owned
jointly by NITROMED and MERCK ("Joint Information and
Inventions").
NITROMED shall promptly disclose to MERCK the development, making,
conception or reduction to practice of NITROMED Information and
Inventions. MERCK shall disclose to NITROMED the development, making,
conception or reduction to practice of MERCK Information and Inventions
no later than promptly after the filing of a patent application on such
Merck Information and Invention.
2.8 RESEARCH PROGRAM TERM. Except as otherwise provided herein, the term of
the Research Program shall commence on the January 1, 2003 and continue
for a period of three (3) years (the "Research Program Term"). The
Parties may, upon mutual written agreement, extend the term of the
Research Program for additional one (1) year periods, at least one
hundred twenty (120) days prior to the three (3) year anniversary of
the commencement of the Research Program and, thereafter, at least one
hundred twenty (120) days prior to each subsequent anniversary. Upon
any extension of the term of Research Program, if desirable, Attachment
2.1 setting forth the Research Program shall be amended in writing by
mutual agreement. As used throughout the Agreement any reference to
Research Program Term shall include any extension thereof. If there is
a Change of Control event, MERCK shall have the right , to terminate
the Research Program by providing written notice to NITROMED within
ninety (90) days after MERCK receives written notice of the Change of
Control event. Any such termination by MERCK shall terminate its
obligations under Section 5.1 and shall not terminate the Agreement.
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ARTICLE III
LICENSE; EXCHANGE OF INFORMATION; DEVELOPMENT AND
COMMERCIALIZATION
3.1 LICENSE GRANT.
(a) NITROMED hereby grants to MERCK an exclusive, royalty bearing
license in the Territory, with a right to sublicense as
provided in subsection (c) below, under Patent Rights,
NITROMED Information and Inventions, NITROMED's rights to the
Joint Information and Inventions and NITROMED Know-How to
practice under the Patent Rights, NITROMED Information and
Inventions, NITROMED's rights to the Joint Information and
Inventions and NITROMED Know-How, to the extent required to
develop, make, have made, use, sell, offer to sell or import
NO-Enhanced ▇▇▇-2 Compounds and Licensed Product(s) in the
Field.
(b) Any of NITROMED's rights to the Patent Rights, NITROMED
Information and Inventions, NITROMED's rights to the Joint
Information and Inventions and NITROMED Know-How not
specifically licensed to MERCK pursuant to Section 3.1(a)
shall be retained by NITROMED, including, but not limited to,
any applications outside of the Field. NITROMED shall retain
only the rights necessary under Patent Rights, NITROMED
Information and Inventions, NITROMED's rights to the Joint
Information and NITROMED Know-How, in the Field, to discover,
develop, make and use a Licensed Product in the Territory and
solely for the purpose of fulfilling its obligations under the
Research Plan.
(c) MERCK shall have the right to enter into sublicenses relating
to the license granted in Sections 3.1(a) to Third Parties
and/or Affiliates. Each such sublicense shall be subject and
subordinate to, and consistent with, the terms and conditions
of this Agreement, including but not limited to provisions
related to confidentiality (Article IV), consequential
damages, commercialization and development, record-keeping and
audit provisions and shall provide that any such sublicensee
shall not further sublicense. MERCK shall remain responsible
for the performance of its sublicensees, and shall ensure that
any such sublicensees comply with the relevant provisions of
this Agreement. In the event of a material default by any
sublicensee under a sublicense agreement, MERCK will inform
NITROMED and take such action which in MERCK's reasonable
business judgment will address such default.
(d) MERCK hereby grants to NITROMED a non-exclusive license in the
Territory to practice under the MERCK Know-How (including any
related patents) and Merck Information and Inventions to the
extent required to perform its obligations under this
Agreement. At NITROMED's request, MERCK shall consider, on a
case-by-case basis, the grant of a license to NITROMED under
the MERCK Information and Inventions for use that (i) is
outside the Field and (ii) related to NO, with the Parties
agreeing on the terms of such license, including the amount of
royalty payments, if any, provided that the decision whether
to grant such license shall be in MERCK's sole discretion.
11
3.2 COVENANT NOT TO ▇▇▇. In the event the development, making, having made,
use, sale or import by MERCK, its Affiliates and/or sublicensees of
NO-Enhanced ▇▇▇-2 Compounds and Licensed Product(s) would infringe
during the term of this Agreement a claim of an issued patent which
NITROMED Controls and which patent is not covered by the grant in
Section 3.1, NITROMED hereby covenants not to ▇▇▇ ▇▇▇▇▇, its
sublicensees, successors and assigns under such issued patent with
respect to the development, making, having made, using, selling,
offering for sale or importing NO-Enhanced ▇▇▇-2 Compounds and Licensed
Product(s) in the Territory. NITROMED's successor and assigns shall
agree in writing to be bound by similar terms as NITROMED under this
Section 3.2.
3.3 SECTION 365(n) OF THE BANKRUPTCY CODE. All rights and licenses granted
under or pursuant to any section of this Agreement are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the U.S.
Bankruptcy Code, licenses of rights to "intellectual property" as
defined under Section 101(35A) of the U.S. Bankruptcy Code. The Parties
shall retain and may fully exercise all of their respective rights and
elections under the U.S. Bankruptcy Code. The Parties agree that MERCK,
as a licensee of such rights under this Agreement, shall retain and may
fully exercise all of its rights and elections under the U.S.
Bankruptcy Code, and that upon commencement of a bankruptcy proceeding
by or against NITROMED under the U.S. Bankruptcy Code, MERCK shall be
entitled to a complete duplicate of or complete access to (as MERCK
deems appropriate), any such intellectual property and all embodiments
of such intellectual property, provided MERCK continues to fulfill its
payment and/or royalty obligations as specified herein in full. Such
intellectual property and all embodiments thereof shall be promptly
delivered to MERCK (i) upon any such commencement of a bankruptcy
proceeding upon written request therefore by MERCK, unless NITROMED
elects to continue to perform all of its obligations under this
Agreement or (ii) if not delivered under (i) above, upon the rejection
of this Agreement by or on behalf of NITROMED upon written request
therefore by MERCK. The foregoing is without prejudice to any rights
MERCK may have arising under the U.S. Bankruptcy Code or other
applicable law.
3.4 DEVELOPMENT AND COMMERCIALIZATION. MERCK shall use Commercially
Reasonable Efforts, at its own expense, to undertake the Development
Work and to commercialize a Licensed Product for each Indication (and,
if applicable, Other Indication) in each country in the Territory where
in MERCK's reasonable opinion it is commercially viable to do so,
PROVIDED THAT MERCK shall undertake such Development Work and
commercialization for each Indication (and, if applicable, Other
Indication) in each Major Market. MERCK shall, in writing and on a
quarterly basis, keep NITROMED advised of its activities under this
Section 3.4 in accordance with Section 2.6.3 and shall no more
frequently than a semi-annual basis upon the request of NITROMED hold a
meeting for MERCK to inform NITROMED of commercialization and
development activities for Licensed Products that occurred since the
last such meeting and plans for the next six (6) months; provided
however that in the event of a Change of Control, MERCK's obligations
to meet and discuss any commercialization and development activities
under this Section 3.4 shall cease.
12
3.5 EXCUSED PERFORMANCE. The obligations of MERCK with respect to any
Licensed Product under Section 3.4 are expressly conditioned upon the
continuing absence of any adverse condition or event relating to the
safety or efficacy of the Licensed Product, on an
Indication-by-Indication basis (including, if applicable, any Other
Indication), and the obligation of MERCK to develop or market any such
Licensed Product for an Indication shall be delayed or suspended so
long as in MERCK's reasonable opinion any such condition or event
exists for any such Indication. MERCK shall promptly notify NITROMED of
such adverse conditions or events and during any such delay or
suspension under this Section 3.5, the Parties shall on a quarterly
basis hold a meeting to discuss the efforts undertaken by MERCK to
remove the adverse condition or event relating to the safety or
efficacy of the Licensed Product.
3.6 RIGHTS REVERSION. After the Research Term, if NITROMED sends a Status
Notice to MERCK, MERCK shall, in good faith, consider such Status
Notice and notify NITROMED in writing as soon as MERCK makes a
determination (which shall not be later than [**] of MERCK receiving a
Status Notice) of whether or not (i) it intends to use Commercially
Reasonable Efforts to pursue research, development or commercialization
of the specific NO-Enhanced ▇▇▇-2 Compound specified in the Status
Notice, (ii) it intends to use Commercially Reasonable Efforts to
pursue research, development or commercialization of a NO-Enhanced
▇▇▇-2 Compound or Licensed Product for the Indication or Other
Indication specified in the Status Notice, or (iii) whether it intends
to pursue dispute resolution under Section 9.6 regarding the Status
Notice (a "MERCK Notice"). If MERCK indicates that it intends to use
such Commercially Reasonable Efforts, MERCK shall, as soon as
practicable (which shall be no later than [**] after providing the
MERCK Notice), begin research, development or commercialization, using
Commercially Reasonable Efforts, to research, develop and/or
commercialize the applicable NO-Enhanced ▇▇▇-2 Compound or Licensed
Product in the applicable Indication or Other Indication. In the event
that MERCK indicates it intends to begin research for an Other
Indication, the parties shall promptly begin to develop a workplan and
amendment to the Research Plan reflecting such research. If any one of
the following events occur: (i) MERCK fails to provide a Merck Notice
within [**] of the Status Notice, (ii) MERCK indicates in a Merck
Notice that it does not intend to use such Commercially Reasonable
Efforts, (iii) MERCK fails to initiate dispute resolution within [**]
from the date of the MERCK Notice indicating it will pursue dispute
resolution, (iv) MERCK fails to initiate research, development or
commercialization of a Licensed Product in the applicable Indication or
Other Indication within [**] from the date of the MERCK Notice
indicating it will pursue such research, development or
commercialization, or (v) after dispute resolution pursuant to Section
9.6 MERCK is determined not to have pursued Commercially Reasonable
Efforts, then MERCK's licenses under Section 3.1 shall become
non-exclusive with respect to such Indication, Other Indication or
specific NO Enhanced ▇▇▇-2 Compound as applicable; provided however
that Merck's licenses under Section 3.1 shall continue to be exclusive
for all Indications or Other Indications with respect to any specific
NO-Enhanced ▇▇▇ 2 Compound or Licensed Product that Merck is pursuing
with Commercially Reasonable Efforts.
13
ARTICLE IV
CONFIDENTIALITY AND PUBLICATION
4.1 NONDISCLOSURE OBLIGATION. All Proprietary Information disclosed by one
Party to the other Party hereunder shall be maintained in confidence by
the receiving Party and shall not be disclosed to a Third Party or used
for any purpose except as set forth herein without the prior written
consent of the other Party, except to the extent that such Proprietary
Information:
(a) is known by receiving Party at the time of its receipt, and
not through a prior disclosure by the disclosing Party, as
documented by business records;
(b) is in the public domain through no fault of the receiving
Party;
(c) is subsequently disclosed to a receiving Party by a Third
Party who may lawfully do so and is not under an obligation of
confidentiality to the disclosing Party;
(d) is developed by the receiving Party independently of
Proprietary Information received from the other Party;
(e) is disclosed to governmental or other regulatory agencies in
order to obtain patents or to gain approval to conduct
clinical trials or to market Licensed Product, but such
disclosure may be only to the extent reasonably necessary to
obtain patents or authorizations;
(f) is deemed necessary by each Party to be disclosed to
sublicensees, agents, consultants, Affiliates and/or other
Third Parties for the research and development, manufacturing
and/or marketing of the Licensed Product (or for such parties
to determine their interest in performing such activities) in
accordance with this Agreement on the condition that such
Third Parties agree to be bound by the confidentiality
obligations contained this Agreement, PROVIDED the term of
confidentiality for such Third Parties shall be no less than
seven (7) years; or
(g) is required to be disclosed by law or court order, provided
that notice is promptly delivered to the other Party in order
to provide an opportunity to challenge or limit the disclosure
obligations.
Each Party shall retain all rights to the Proprietary Information it
provides to the other Party.
4.2 PUBLICATION. MERCK and NITROMED each acknowledge the other Party's
interest in publishing its results to obtain recognition within the
scientific community and to advance the state of scientific knowledge.
Each Party also recognizes the mutual interest in obtaining valid
patent protection and in protecting business interests and trade secret
information. Consequently, either Party, its employees or consultants
wishing to make a publication shall deliver to the other Party a copy
of the proposed written publication or
14
an outline of an oral disclosure at least sixty (60) days prior to
submission for publication or presentation. The reviewing Party shall
have the right (a) to propose modifications to the publication for
patent reasons, trade secret reasons or business reasons or (b) to
request a reasonable delay in publication or presentation in order to
protect patentable information. If the reviewing Party requests a
delay, the publishing Party shall delay submission or presentation for
a period of ninety (90) days to enable patent applications protecting
each Party's rights in such information to be filed in accordance with
Article VII below. Upon expiration of such ninety (90) days, the
publishing Party shall be free to proceed with the publication or
presentation. If the reviewing Party requests modifications to the
publication, the publishing Party shall edit such publication to
prevent disclosure of trade secret or proprietary business information
prior to submission of the publication or presentation.
4.3 PRESS RELEASE. The Parties agree that NITROMED may issue a press
release after execution of the Agreement in a form to be mutually
agreed upon. The Parties recognize that either Party may desire to make
public announcements with respect to the activities undertaken pursuant
to this Agreement. The Parties agree that any such announcement will
not contain confidential business or technical information of the other
Party and, if disclosure of confidential business or technical
information is required by law or regulation, will make reasonable
efforts to minimize such disclosure and obtain confidential treatment
for any such information that is disclosed to a governmental agency or
group. Each Party agrees to provide to the other Party a copy of any
public announcement as soon as reasonably practicable under the
circumstances prior to its scheduled release. Except under
extraordinary circumstances, each Party shall provide the other with an
advance copy of any press release at least five (5) business days prior
to the scheduled disclosure. Each Party shall have the right to
expeditiously review and indicate reasonable changes to any
announcement regarding this Agreement or the subject matter of this
Agreement; provided that such right of review and recommendation shall
only apply for the first time that specific information is to be
disclosed, and shall not apply to the subsequent disclosure of
substantially similar information that has previously been disclosed.
Except as otherwise required by law, the Party whose press release has
been reviewed shall remove any information the reviewing Party
reasonably deems to be inappropriate for disclosure.
4.4 DISCLOSURE. Either Party may disclose the terms of this Agreement to
the extent required, in the reasonable opinion of such Party's legal
counsel, to comply with applicable laws, including without limitation
the rules and regulations promulgated by the United States Securities
and Exchange Commission or any other governmental agency.
Notwithstanding the foregoing, before disclosing this Agreement or any
of the terms hereof pursuant to this Section 4.4, the Parties will
consult with one another on the terms of this Agreement to be redacted
in making any such disclosure. If a Party discloses this Agreement or
any of the terms hereof in accordance with this Section 4.4, such Party
agrees, at its own expense, to seek confidential treatment of the
portions of this Agreement or such terms, as may be reasonably
requested by the other Party.
15
ARTICLE V
PAYMENTS; ROYALTIES AND REPORTS
5.0 UNITED STATES CURRENCY. Unless otherwise expressly stated herein all
references to currency amounts as dollars or $ shall mean amounts in
United States dollars.
5.1 RESEARCH PROGRAM FUNDING. As consideration to NITROMED for the research
and development activities undertaken by NITROMED pursuant to this
Agreement, MERCK shall pay to NITROMED during the Research Program
Term, for the FTEs set forth in Section 2.2, in advance on a quarterly
basis at the beginning of each Calendar Quarter, at the FTE Rate
commencing upon the Effective Date. The first payment due under this
section shall be paid within thirty (30) days of the Effective Date.
5.2 CONSIDERATION FOR LICENSE. In consideration for the licenses granted
herein under the Patent Rights, NITROMED Information and Inventions,
NITROMED'S rights to the Joint Information and Inventions, and NITROMED
Know-How, upon the terms and conditions contained herein, MERCK shall
pay to NITROMED the following amounts:
A non-refundable technology access fee accruing $10,000,000.
upon execution of the Agreement
MERCK shall pay the fee due under this Section 5.2 to NITROMED within
thirty (30) days of the Effective Date.
5.3 MILESTONE PAYMENTS. Subject to the terms and conditions in this
Agreement, MERCK shall pay to NITROMED the following milestone
payments:
$5,000,000.
(a) Upon [**] $[**].
(b) Upon [**] $[**].
(c) Upon [**] $[**].
$[**].
(d) Upon [**] $[**].
(e) Upon [**] $[**].
(f) Upon [**]
(g) Upon [**]
16
MERCK shall notify NITROMED in writing within [**] days upon the
achievement of each milestone, such notice to be accompanied by payment
of the appropriate milestone payment. The payment under Section 5.3(a)
shall be made only once. The payment under the milestones described in
Section 5.3(b) through (d) shall be made once for each individual
Indication (by way of example, payment under Section 5.3(b) may be made
up to [**] times, once for each Indication in subsections (i) - (iii)
in Section 1.17) and the milestone described in Sections 5.3(e) through
(g) shall be paid as follows: (i) each of such milestones shall be
payable no more than [**] for each Indication, irrespective of the
number of Licensed Products for which such milestone is achieved; (ii)
with respect to each Licensed Product, each of such milestones shall be
payable only upon the first occurrence of such milestone for each
Indication; (iii) for no more than [**] Indications for a specific
Licensed Product; (iv) for purpose of the foregoing, Licensed Products
which contain the same [**] shall be considered to be the same Licensed
Product; and (v) as a result of the foregoing limitations, each of such
milestones shall be payable a maximum of [**] times. For example, if
Licensed Product X is developed for [**] Indications, the milestones
are paid for each of such Indications; if Licensed Product Y is
developed for all [**] Indications and is developed as well for an
additional disease state within one of these Indications, the
milestones are paid for the [**] Indications, [**].
5.4 ROYALTIES.
5.4.1 ROYALTIES PAYABLE BY MERCK. Subject to the terms and conditions of this
Agreement, MERCK shall pay to NITROMED royalties on a Licensed
Product-by-Licensed Product basis the following amounts.
(a) For the initial [**] dollars of sales of each Licensed Product in [**] percent
the Territory in a Calendar Year by MERCK, its Affiliates or ([**]%) of
sublicensees Net Sales
(b) For those sales greater than [**] dollars and less than or equal [**] percent
to [**] dollars of each Licensed Product in the Territory in a ([**]%) of
Calendar Year by MERCK, its Affiliates or sublicensees Net Sales
(c) For those sales greater than [**] dollars and less than or equal [**] percent
to [**] dollars of each Licensed Product in the Territory in a ([**]%) of
Calendar Year by MERCK, its Affiliates or sublicensees Net Sales
(d) For those sales over [**] dollars of each Licensed Product in the [**] percent
Territory in a Calendar Year by MERCK, its Affiliates or ([**]%) of
sublicensees Net Sales
Royalties on each Licensed Product at the rate set forth above shall
continue on a country-by-country basis until the expiration of the
later of: (i) last-to-expire patent with a Valid Patent Claim that
would be infringed by the use or sale of such Licensed
17
Product in such country but for the licenses granted herein; or (ii)
for a period of ten (10) years after First Commercial Sale of such
Licensed Product in such country (the "Royalty Period"). In those
countries of the Territory where (A) there are no Patent Rights
containing a Valid Patent Claim that would be infringed by the use or
sale of the Licensed Product in such country, or (B) when the last
Valid Patent Claim expires during the Royalty Period, royalties shall
be paid at [**] percent of the rates set forth in (a) to (d) above
(calculated as the last sales made in the Territory for the Calendar
Quarter). All royalties are subject to the following conditions:
(a) that only one royalty shall be due with respect to the
same unit of Licensed Product;
(b) that no royalties shall be due upon the sale or other
transfer among MERCK, its Affiliates or sublicensees, but in such cases
the royalty shall be due and calculated upon MERCK's or its Affiliate's
or its sublicense's Net Sales to a Third Party;
(c) no royalties shall accrue on the disposition of Licensed
Product in reasonable quantities by MERCK, Affiliates or its
sublicenses as samples (promotion or otherwise) or as donations (for
example, to non-profit institutions or government agencies for a
non-commercial purpose); and
(d) for purposes of aggregating sales on a Licensed
Product-by-Licensed Product basis, a Licensed Product shall include all
products [**]
5.4.2 ROYALTY PAYABLE UNDER MANAGED PHARMACEUTICAL CONTRACT. It is understood
by the Parties that MERCK may sell Licensed Product(s) to an
independent Third Party (such as a retailer or wholesaler) and may
subsequently perform services relating to Licensed Product(s) and other
products under a managed pharmaceutical benefits contract or other
similar contract. In such cases, it is agreed by the Parties that Net
Sales shall be based on the invoice price to an independent retailer or
wholesaler, as set forth in Section 1.26, notwithstanding that MERCK
may receive compensation arising from the performance of such services.
5.4.3 CHANGE IN SALES PRACTICES. The Parties acknowledge that during the term
of this Agreement, MERCK's sales practices for the marketing and
distribution of Licensed Product may change to the extent to which the
calculation of the payment for royalties on Net Sales may become
impractical or even impossible. In such event the Parties agree to meet
and discuss in good faith new ways of compensating NITROMED to the
extent currently contemplated under Section 5.4.1; provided, however,
if the Parties cannot agree in new ways of compensating NITROMED, the
terms of this Agreement shall remain in full force and effect.
5.4.4 ROYALTIES FOR BULK NO-ENHANCED ▇▇▇-2 COMPOUND. In those cases where
MERCK sells bulk NO-Enhanced ▇▇▇-2 Compound rather than Licensed
Product in packaged form to an independent Third Party, the royalty
obligations of this Article V shall be applicable to the bulk
NO-Enhanced ▇▇▇-2 Compound; provided however that if MERCK obtains
additional compensation relating to either (i) use or commercialization
of such bulk NO-Enhanced ▇▇▇-2 Compound, or (ii) sublicensing
intellectual property rights granted to MERCK in Article III, then the
Parties agree that there shall be
18
additional compensation to NITROMED in an amount to be mutually agreed
upon by the Parties.
5.4.5. COMPULSORY LICENSES. If a compulsory license is granted to a Third
Party with respect to Licensed Product in any country in the Territory
[**] provided by Section 5.4.1., then the royalty rate to be paid by
MERCK on Net Sales in that country under Section 5.4.1 [**].
5.4.6 COMPETITIVE PRODUCT. In the event a Competitive Product is sold in a
country, then the royalty rate to be paid by MERCK on Net Sales in that
country under Section 5.4.1 shall be [**] percent ([**]%) in such
country during such time that a Competitive Product is sold in such
country; provided, however, this Section shall not be applicable if the
royalty rate in such country [**] pursuant to Section 5.4.1.
5.4.7 THIRD PARTY LICENSES. In the event that one or more patent licenses
from other Third Parties are required by MERCK, its Affiliates and
sublicensees in order to develop, make, have made, use or sell the
Licensed Product (hereinafter "Third Party Patent Licenses"), and, in
the absence of such license, the use by MERCK of the Patent Rights,
NITROMED Know-How or NITROMED Information and Inventions would infringe
such Third Party patents, then [**] percent ([**]%) of any
consideration actually paid under such Third Party Patent Licenses by
MERCK, its Affiliates or sublicensees, for sale of such Licensed
Product in a country for such Calendar Quarter shall be creditable
against the royalty payments due NITROMED by MERCK with respect to the
sale of such Licensed Products in such country; PROVIDED THAT the
royalty payment to NITROMED in any Calendar Quarter shall not be
reduced by more than [**] percent ([**]%) of the monies otherwise owed
to NITROMED; and any amounts not able to be reduced due to the
immediately foregoing limitation shall be carried forward to future
Calendar Quarters for crediting against future royalties in such
country. Notwithstanding the foregoing, NITROMED shall assume full
responsibility for any payments to the extent necessary for rights
under the patents identified in Attachment 5.4.7 and/or bear all costs
associated with any legal actions to invalidate such patents.
5.5. REPORTS; PAYMENT OF ROYALTY. During the term of the Agreement following
the First Commercial Sale of a Licensed Product, MERCK shall furnish to
NITROMED a quarterly written report for the Calendar Quarter showing
the sales of all Licensed Products subject to royalty payments sold by
MERCK, its Affiliates and its sublicensees in the Territory during the
reporting period and the royalties payable under this Agreement.
Reports shall be due on the sixtieth (60) day following the close of
each Calendar Quarter. Royalties shown to have accrued by each royalty
report shall be due and payable on the date such royalty report is due.
MERCK shall keep complete and accurate records in sufficient detail to
enable the royalties payable hereunder to be determined.
5.6. AUDITS.
(a) Upon the written request of NITROMED and not more than once in each
Calendar Year, MERCK shall permit an independent certified public
accounting firm of nationally
19
recognized standing selected by NITROMED and reasonably acceptable to
MERCK, at NITROMED's expense, to have access during normal business
hours to such of the records of MERCK as may be reasonably necessary to
verify the accuracy of the royalty reports hereunder for any year
ending not more than twenty-four (24) months prior to the date of such
request. The accounting firm shall disclose to NITROMED only whether
the royalty reports are correct or incorrect and the specific details
concerning any discrepancies. No other information shall be provided to
NITROMED.
(b) If such accounting firm concludes that additional royalties were owed
during such period, MERCK shall pay the additional royalties within
thirty (30) days of the date NITROMED delivers to MERCK such accounting
firm's written report so concluding. The fees charged by such
accounting firm shall be paid by NITROMED unless the underpayment
exceeded five hundred thousand ($500,000) dollars and five percent (5%)
of the royalty owed by MERCK to NITROMED for such Calendar Year, in
which case, MERCK shall pay the fees charged by such accounting firm.
(c) MERCK shall include in each sublicense granted by it pursuant to this
Agreement a provision requiring the sublicensee to make reports to
MERCK, to keep and maintain records of sales made pursuant to such
sublicense and to grant access to such records by NITROMED's
independent accountant to the same extent required of MERCK under this
Agreement. Upon the expiration of twenty-four (24) months following the
end of any year, the calculation of royalties payable with respect to
such year shall be binding and conclusive upon NITROMED, and MERCK and
its sublicensees shall be released from any liability or accountability
with respect to royalties for such year.
(d) NITROMED shall treat all financial information subject to review under
this Section 5.6 or under any sublicense agreement in accordance with
the confidentiality provisions of this Agreement, and shall cause its
accounting firm to enter into an acceptable confidentiality agreement
with MERCK obligating it to retain all such financial information in
confidence pursuant to such confidentiality agreement; provided however
nothing shall prevent NITROMED from using such financial information in
any dispute resolution pursuant to Section 9.6.
5.7 PAYMENT EXCHANGE RATE. All payments to be made by MERCK to NITROMED
under this Agreement shall be made in United States dollars and may be
paid by check made to the order of NITROMED or bank wire transfer in
immediately available funds to such bank account in the United States
designated in writing by NITROMED from time to time. In the case of
sales outside the United States, the rate of exchange to be used in
computing the amount of currency equivalent in United States dollars
due NITROMED shall be made at the rate of exchange utilized by MERCK in
its worldwide accounting system, prevailing on the third to the last
business day of the month prior to the month for which Merck records
such sales.
5.8 INCOME TAX WITHHOLDING. If laws, rules or regulations require
withholding of income taxes or other taxes imposed upon payments set
forth in this Article V, MERCK shall make such withholding payments as
required and subtract such withholding payments from the payments set
forth in this Article V. MERCK shall submit original receipts or
20
other appropriate proof of payment of the withholding taxes to NITROMED
within a reasonable period of time and which are sufficient to allow
NITROMED to document such tax withholdings adequately for purposes of
claiming foreign tax credits and similar benefits.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES AND LIABILITY
6.1 REPRESENTATIONS AND WARRANTIES OF NITROMED. NITROMED represents and
warrants to MERCK that as of the Effective Date:
(a) to the best of NITROMED's knowledge, the Patent Rights and
NITROMED Know-How exist and are not invalid or unenforceable,
in whole or in part;
(b) it has the full right, power and authority to enter into this
Agreement, to perform the Research Program and to grant the
licenses granted under Article III hereof;
(c) it has not previously assigned, transferred, conveyed or
otherwise encumbered its right, title and interest in Patent
Rights or NITROMED Know-How;
(d) to the best of NITROMED's knowledge, it is the sole and
exclusive owner of the Patent Rights and NITROMED Know-How,
all of which are (and shall be, in the case of NITROMED
Information and Invention) free and clear of any liens,
charges and encumbrances, and no other person, corporate or
other private entity, or governmental entity or subdivision
thereof, has or shall have any claim of ownership with respect
to the Patent Rights and NITROMED Know-How, whatsoever;
(e) to the best of NITROMED's knowledge, the exercise of the
license granted to MERCK under the Patent Rights and NITROMED
Know-How do not infringe any intellectual property rights
owned or possessed by any Third Party;
(f) there are no claims, judgments or settlements against or owed
by NITROMED or pending or threatened claims or litigation
relating to the Patent Rights and NITROMED Know-How; and
(g) NITROMED has disclosed to MERCK all reasonably relevant
information regarding the Patent Rights and NITROMED Know-How
licensed under this Agreement, including the existence of any
patent opinions obtained by NITROMED related thereto.
6.2 REPRESENTATIONS AND WARRANTIES OF MERCK. MERCK represents and warrants
to NITROMED that as of the Effective Date:
(a) to the best of MERCK's knowledge, the MERCK Know-How does not
infringe any intellectual property rights owned or possessed
by any Third Party;
21
(b) MERCK shall provide all necessary MERCK Know-How, that is in
MERCK's possession, to NITROMED to permit NITROMED to perform
NITROMED's obligations under the Research Program;
(c) it has the full right, power and authority to enter into this
Agreement and to fulfill it obligations hereunder; and
(d) that all necessary consents, approvals and authorizations of
all government authorities and other persons required to be
obtained by MERCK in connection with the execution, delivery
and performance of this Agreement have been or shall be
obtained.
6.3 NO WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THE
PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, AND PARTICULARLY THAT THE LICENSED
PRODUCT(S) WILL BE SUCCESSFULLY DEVELOPED HEREUNDER, AND IF LICENSED
PRODUCT(S) ARE DEVELOPED, WITH RESPECT TO SUCH LICENSED PRODUCT(S), THE
PARTIES DISCLAIM ALL IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT,
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6.4 INDEMNIFICATION. MERCK agrees to defend NITROMED and its Affiliates at
its cost and expense, and will indemnify and hold NITROMED and its
Affiliates and their respective directors, officers, employees and
agents (the "NITROMED Indemnified Parties") harmless from and against
any losses, costs, damages, fees or expenses arising out of any Third
Party claim relating to personal injury or death from the development,
manufacture, use, sale or other disposition of the Licensed Product by
MERCK and/or its Affiliates, sublicensees or collaborators. In the
event of any such claim against the NITROMED Indemnified Parties by any
Third Party, NITROMED shall promptly notify MERCK in writing of the
claim and MERCK shall manage and control, at its sole expense, the
defense of the claim and its settlement. The NITROMED Indemnified
Parties shall cooperate with MERCK and may, at their option and
expense, be represented in any such action or proceeding. MERCK shall
not be liable for any litigation costs or expenses incurred by the
NITROMED Indemnified Parties without MERCK's prior written
authorization. In addition, MERCK shall not be responsible for the
indemnification of any NITROMED Indemnified Party arising from any
negligent or intentional acts by such NITROMED Indemnified Party, or as
the result of any settlement or compromise by the NITROMED Indemnified
Parties without MERCK's prior written consent.
6.5 NO CONSEQUENTIAL DAMAGES. UNLESS RESULTING FROM A PARTY'S WILLFUL
MISCONDUCT, NEITHER PARTY HERETO WILL BE LIABLE FOR SPECIAL,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE, MULTIPLE OR OTHER
INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS
RIGHTS HEREUNDER, OR FOR LOSS OF PROFITS, LOSS OF DATA OR LOSS OF USE
DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT
WHETHER BASED ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇ LIABILITY OR
OTHERWISE, REGARDLESS OF
22
ANY NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 6.5 IS INTENDED TO
LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER
PARTY UNDER THIS AGREEMENT.
ARTICLE VII
PATENT PROVISIONS
7.1 FILING, PROSECUTION AND MAINTENANCE OF PATENTS.
(a) PATENT RIGHTS. NITROMED shall have the exclusive right and
option to file and prosecute any patent applications and
maintain any patents covering the Patent Rights licensed to
MERCK under this Agreement, upon appropriate consultation with
MERCK including an opportunity to review and comment on any
papers to be filed in any patent office prior to their
submission. NITROMED shall promptly give notice to MERCK of
the allowance, grant, lapse, revocation, surrender,
invalidation or abandonment of any Patent Rights licensed to
MERCK for which NITROMED is responsible for the filing,
prosecution and maintenance. If NITROMED declines to file and
prosecute any such patent applications or maintain any such
patents covering any Patent Rights licensed to MERCK under
this Agreement, it shall give MERCK reasonable notice to this
effect and thereafter MERCK may, upon written notice to
NITROMED, file and prosecute such patent applications and
maintain such patents in NITROMED's name.
(b) NITROMED INFORMATION AND INVENTIONS. NITROMED shall have the
exclusive right and option to file and prosecute any patent
applications and maintain any patents covering NITROMED
Information and Inventions, upon appropriate consultation with
MERCK including an opportunity to review and comment on any
papers to be filed in any patent office prior to their
submission. If NITROMED declines the option to file and
prosecute any such patent applications or maintain any such
patents covering any NITROMED Information and Invention, it
shall give MERCK reasonable notice to this effect and
thereafter MERCK may, upon written notice to NITROMED, file
and prosecute such patent applications and maintain such
patents in NITROMED's name.
(c) JOINT INFORMATION AND INVENTIONS. MERCK shall have the
exclusive right and option to file and prosecute any patent
applications and to maintain any patents covering Joint
Information and Inventions owned jointly by MERCK and
NITROMED, upon appropriate consultation with NITROMED
including an opportunity to review and comment on any papers
to be filed in any patent office prior to their submission. If
MERCK declines the option to file and prosecute any such
patent applications or maintain any such patents covering any
such Joint Information and Inventions, it shall give NITROMED
reasonable notice to this effect and thereafter NITROMED may,
upon written notice to MERCK, file and prosecute such patent
applications and maintain such patents jointly in both
Parties' names.
23
(d) MERCK INFORMATION AND INVENTIONS. MERCK shall have the
exclusive right and option to file and prosecute any patent
applications and to maintain any patents covering MERCK
Information and Inventions, at MERCK's expense.
(e) EXPENSES. All costs associated with filing, prosecuting and
maintaining the ▇▇▇-2 Compound Specific Patent Rights shall be
shared equally by the Parties. All costs associated with
filing, prosecuting and maintaining all other NITROMED
Information and Inventions shall be borne by NITROMED. All
costs associated with the filing, prosecuting and maintaining
the Joint Information and Inventions and MERCK Information and
Inventions under Sections 7.1(c) and (d) shall be at MERCK's
expense. If the initial prosecuting Party declines to file,
prosecute and/or maintain any of the Patent Rights and
Research Information and Inventions under Sections 7.1 (a)-(c)
and the other Party assumes such responsibilities, the initial
prosecuting Party shall continue to pay [**] percent ([**]%)
of the costs associated with these patents or patent
applications; provided however that if the initial prosecuting
Party wishes to abandon any such patents or patent
applications it shall notify the other Party who shall have
the option to continue such patents or patent applications at
its own expense and the initial prosecuting Party shall assign
it rights to the other Party and the assigned patents or
patent applications shall no longer be Patent Rights or
Research Information and Inventions. As used herein the term
"▇▇▇-2 Compound Specific Patent Rights" means (i) those Patent
Rights, and (ii) those NITROMED Information and Inventions,
whose patents or patent application principally contain claims
that relate to ▇▇▇-2 Compounds, NO-▇▇▇-2 Compounds or
NO-Enhanced ▇▇▇-2 Compounds.
7.2 INTERFERENCE, OPPOSITION, REEXAMINATION AND REISSUE.
(a) NITROMED shall, within ten (10) days of learning of such
event, inform MERCK of any request for, or filing or
declaration of, any interference, opposition, or reexamination
relating to Patent Rights. MERCK and NITROMED shall thereafter
consult and cooperate fully to determine a course of action
with respect to any such proceeding. MERCK shall have the
right to review and approve any submission to be made in
connection with such proceeding.
(b) NITROMED shall not initiate any reexamination, opposition,
interference or reissue proceeding relating to Patent Rights
without the prior written consent to MERCK, which consent
shall not be unreasonably withheld.
(c) In connection with any interference, opposition, reissue, or
reexamination proceeding relating to Patent Rights, MERCK and
NITROMED will cooperate fully and will provide each other with
any information or assistance that either may reasonably
request. NITROMED shall keep MERCK informed of developments in
any such action or proceeding, including to the extent
permissible by law, consultation and approval of any
settlement.
(d) The Parties shall equally bear the expense of any
interference, opposition, reexamination, or reissue proceeding
specified in this Section 7.2 relating to ▇▇▇-2
24
Compound Specific Patent Rights, including but not limited to
any costs incurred by NITROMED in fulfilling its obligations
under this Section 7.2. NITROMED shall bear the expense of any
interference, opposition, reexamination, or reissue proceeding
specified in this Section 7.2 relating to any NitroMed
Information and Inventions that do not constitute ▇▇▇-2
Compound Specific Patent Rights, including but not limited to
any costs incurred by NITROMED in fulfilling its obligations
under this Section 7.2.
7.3 ENFORCEMENT AND DEFENSE.
(a) NITROMED shall give MERCK notice of either (i) any
infringement of Patent Rights, (ii) any misappropriation or
misuse of NITROMED Know-How; or (iii) infringement,
misappropriation or misuse of the Research Information and
Inventions, that may come to NITROMED's attention. MERCK and
NITROMED shall thereafter consult and cooperate fully to
determine a course of action, including but not limited to the
commencement of legal action by either or both MERCK and
NITROMED, to terminate any infringement of Patent Rights,
Research Information and Inventions or any misappropriation or
misuse of NITROMED Know-How. However, NITROMED, upon notice to
MERCK, shall have the first right to initiate and prosecute
such legal action (other than for the MERCK Information and
Inventions) at its own expense and in the name of NITROMED and
MERCK, or to control the defense of any declaratory judgment
action relating to Patent Rights, Research Information and
Inventions or NITROMED Know-How. NITROMED shall promptly
inform MERCK if it elects not to exercise such first right and
MERCK shall thereafter have the right to either initiate and
prosecute such action or to control the defense of such
declaratory judgment action in the name of MERCK and, if
necessary, NITROMED and the Parties shall share the expense of
such suit equally; provided that MERCK shall pay all costs and
shall recoup NITROMED's [**]percent ([**]%) share as a set-off
against royalties or milestones until NITROMED's share has
been fully paid; provided that the royalty payment to NITROMED
in any Calendar Quarter shall not be reduced by more than [**]
percent ([**]%) of the monies otherwise owed to NITROMED; and
any amounts not able to be reduced due to the immediately
foregoing limitation shall be carried forward to future
Calendar Quarters for crediting against future royalties in
such country. Each Party shall have the right to be
represented by counsel of its own choice.
(b) For any action to terminate any infringement of Patent Rights
or any misappropriation or misuse of NITROMED Know-How, in the
event that MERCK is unable to initiate or prosecute such
action solely in its own name, NITROMED will join such action
voluntarily and will execute and cause its Affiliates to
execute all documents necessary for MERCK to initiate
litigation to prosecute and maintain such action.
(c) Prior to commencing any action pursuant to subsections (a) or
(b) above, each Party shall consult with the other Party and
shall consider the views of the other Party regarding the
advisability of the proposed action. In connection with any
action, MERCK and NITROMED will cooperate fully and will
provide each other with any
25
information or assistance that either may reasonably request
any such action. MERCK shall keep NITROMED informed of
developments in any action or proceeding, including the
consultation and approval of any settlement negotiations and
the terms of any offer related thereto. Neither Party shall
enter into any settlement, consent judgment, or other
voluntary final disposition without the prior written consent
of the other Party.
(d) Any recovery obtained by either or both MERCK and NITROMED in
connection with or as a result of any action contemplated by
this Section 7.3, whether by settlement or otherwise, shall be
shared in order as follows:
(i) the Party which initiated and prosecuted the action
shall recoup all of its costs and expenses incurred
in connection with the action;
(ii) the other Party shall then, to the extent possible,
recover its costs and expenses incurred in connection
with the action;
(iii) the amount of any recovery remaining from ordinary
damages shall then be allocated between the Parties
such that MERCK shall receive an amount equal to its
lost profits or a reasonable royalty on the
infringing sales, or whichever measure of damages the
court shall have applied, and that NITROMED shall
receive a reasonable approximation of the royalties
and other amounts that MERCK would have paid to
NITROMED if MERCK had sold the infringing products
rather than the infringer, and on a pro rata basis
taking into consideration the relative economic
losses suffered by each Party; and
(iv) the amount of any recovery remaining from special or
punitive damages shall be shared equally by the
Parties in any such award.
(e) NITROMED shall inform MERCK of any certification regarding any
Patent Rights it has received pursuant to either 21 U.S.C.
ss.ss.355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) or its successor
provisions or any similar provisions in a country in the
Territory other than the United States and shall provide MERCK
with a copy of such certification within five (5) days of
receipt. NITROMED's and MERCK's rights with respect to the
initiation and prosecution of any legal action as a result of
such certification or any recovery obtained as a result of
such legal action shall be as defined in Sections 7.3(a)-(d)
hereof; provided, however, NITROMED shall exercise its first
right to initiate and prosecute any action and shall inform
MERCK of such decision within ten (10) days of receipt of the
certification, after which time MERCK shall have the right to
initiate and prosecute such action.
(f) In the event that a Third Party brings an action against
NITROMED or MERCK alleging invalidity, unenforceability, or
non-infringement of the Patent Rights, the Parties shall
cooperate as defined above and shall mutually agree upon an
appropriate course of action.
26
7.4 PATENT TERM RESTORATION. The Parties hereto shall cooperate with each
other in obtaining patent term restoration or supplemental protection
certificates or their equivalents in any country in the Territory where
applicable to Patent Rights. In the event that elections with respect
to obtaining such patent term restoration are to be made, MERCK shall
have the right to make a good faith election of the patent to be used.
In the event MERCK does not promptly make an election of a patent for
patent term restoration, NITROMED shall have the right to make a good
faith election of the patent to be used.
ARTICLE VIII
TERM AND TERMINATION
8.1 TERM AND EXPIRATION. This Agreement shall be effective as of the
Effective Date and unless terminated earlier pursuant to Sections 8.2
or 8.3 below, the term of this Agreement shall continue in effect until
expiration of all royalty obligations hereunder. Upon expiration of
this Agreement due to expiration of all royalty obligations hereunder,
MERCK's licenses pursuant to Section 3.1 shall become non-exclusive,
fully paid-up, perpetual licenses which shall be limited to the Field.
8.2 TERMINATION BY MERCK. Notwithstanding anything contained herein to the
contrary, MERCK shall have the right to terminate this Agreement at any
time in its sole discretion after the Research Program Term, by giving
ninety (90) days advance written notice to NITROMED. In the event of
such termination, the rights and obligations hereunder, including any
payment obligations not due and owing as of the termination date shall
terminate and NITROMED will grant MERCK a fully paid-up non-exclusive
license to use the NITROMED Information and Inventions solely for
internal research purposes.
8.3 TERMINATION.
8.3.1 TERMINATION FOR CAUSE. This Agreement may be terminated by
notice by either Party at any time during the term of this
Agreement if the other Party is in breach of its material
obligations hereunder by causes and reasons within its control
and has not cured such breach within ninety (90) days after
written notice requesting cure of the breach (other than for
non-payment which must be cured within forty five (45) days);
provided, however, in the event of a good faith dispute with
respect to the existence of a material breach, the ninety (90)
day or forty five (45) day cure period shall be followed until
such time as the dispute is resolved pursuant to Section 9.6
hereof.
8.3.2 EFFECT OF TERMINATION FOR CAUSE ON LICENSE. In the event MERCK
terminates this Agreement under Section 8.3.1, MERCK's
licenses pursuant to Sections 3.1 shall become exclusive,
perpetual licenses which are limited to the Field; provided,
however, MERCK shall continue to fulfill MERCK's payment
and/or royalty obligations as specified herein; provided,
further, MERCK may reduce such payment and/or royalty
obligations by the amount of monetary damage suffered by MERCK
as a direct result of NITROMED's breach of this Agreement and
NITROMED shall, within thirty (30) days after such
27
termination return or cause to be returned to MERCK all
Licensed Products, NO-Enhanced ▇▇▇-2 Compounds, MERCK Know-How
or other substances or compositions delivered or provided by
MERCK, as well as any other material provided by MERCK in any
medium. In the event that NITROMED terminates this Agreement
under Section 8.3.1, MERCK's licenses pursuant to Sections 3.1
shall terminate as of such termination date and MERCK shall,
within thirty (30) days after such termination, return or
cause to be returned to NITROMED all Licensed Products,
NO-Enhanced ▇▇▇-2 Compounds, Know-How or other substances or
compositions delivered or provided by NITROMED, as well as any
other material provided by NITROMED in any medium.
8.4 EFFECT OF TERMINATION. Expiration or termination of the Agreement shall
not relieve the Parties of any obligation accruing prior to such
expiration or termination and nothing in this Agreement shall be
construed to release either Party from any obligations that matured
prior to the effective date of expiration or termination, and the
provisions of Sections 2.6.1, 2.6.2, 3.3, 6.3, 6.4, 6.5, 8.3.2,
Articles IV, V, VII and IX shall survive the expiration or termination
of the Agreement. Any expiration or early termination of this Agreement
shall be without prejudice to the rights of either Party against the
other accrued or accruing under this Agreement prior to termination,
including the obligation to pay royalties for Licensed Product(s) sold
prior to such termination.
ARTICLE IX
MISCELLANEOUS
9.1. FORCE MAJEURE. Neither Party shall be held liable or responsible to the
other Party nor be deemed to have defaulted under or breached the
Agreement for failure or delay in fulfilling or performing any term of
the Agreement when such failure or delay is caused by or results from
causes beyond the reasonable control of the affected Party including,
but not limited to, fire, floods, embargoes, war, acts of war (whether
war be declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, acts of God or acts,
omissions or delays in acting by any governmental authority or the
other Party. The affected Party shall notify the other Party of such
force majeure circumstances as soon as reasonably practical.
9.2. ASSIGNMENT. The Agreement may not be assigned or otherwise transferred,
nor, except as expressly provided hereunder, may any right or
obligations hereunder be assigned or transferred, by either Party
without the consent of the other Party; PROVIDED, HOWEVER, that either
Party may, without such consent, assign the Agreement and its rights
and obligations hereunder to an Affiliate or in connection with the
transfer or sale of all or substantially all of its assets related to
the Licensed Products or the business, or in the event of its merger or
consolidation or change in control or similar transaction. Any
permitted assignee shall assume all obligations of its assignor under
the Agreement.
9.3. SEVERABILITY. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be
28
affected or impaired thereby, unless the absence of the invalidated
provision(s) adversely affect the substantive rights of the Parties.
The Parties shall in such an instance use their best efforts to replace
the invalid, illegal or unenforceable provision(s) with valid, legal
and enforceable provision(s) which, insofar as practical, implement the
purposes of this Agreement.
9.4. NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered
personally, sent by telecopier (and promptly confirmed by personal
delivery, registered or certified mail or overnight courier), sent by
nationally-recognized overnight courier or sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:
if to NITROMED, to: NitroMed, Inc.
▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to MERCK, to: Merck Frosst Canada & Co.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copies to: Merck Frosst Canada & Co.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Director, Legal Affairs
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
29
Merck & Co., Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Secretary
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the Party to whom notice is to be given may
have furnished to the other Party in writing in accordance herewith.
Any such communication shall be deemed to have been given when
delivered if personally delivered or sent by telecopier on a business
day, on the business day after dispatch if sent by
nationally-recognized overnight courier and on the third business day
following the date of mailing if sent by mail.
9.5. APPLICABLE LAW. The Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey and the United
States without reference to any rules of conflict of laws or renvoi.
9.6. DISPUTE RESOLUTION. The Parties shall negotiate in good faith and use
reasonable efforts to settle any dispute, controversy or claim arising
from or related to this Agreement or the breach thereof. If the Parties
do not fully settle, and a Party wishes to pursue the matter, each such
dispute, controversy or claim that is not an "Excluded Claim" shall be
finally resolved by binding arbitration in accordance with the
Commercial Arbitration Rules and Supplementary Procedures for Large
Complex Disputes of the American Arbitration Association ("AAA"), and
judgment on the arbitration award may be entered in any court having
jurisdiction thereof. The arbitration shall be conducted by a panel of
three persons experienced in the pharmaceutical business: within 30
days after initiation of arbitration, each Party shall select one
person to act as arbitrator and the two party-selected arbitrators
shall select a third arbitrator within 30 days of their appointment. If
the arbitrators selected by the Parties are unable or fail to agree
upon the third arbitrator, the third arbitrator shall be appointed by
the AAA. The place of arbitration shall be New York, New York. Either
Party may apply to the arbitrators for interim injunctive relief until
the arbitration award is rendered or the controversy is otherwise
resolved. Either Party also may, without waiving any remedy under this
Agreement, seek from any court having jurisdiction any injunctive or
provisional relief necessary to protect the rights or property of that
Party pending the arbitration award. The arbitrators shall have no
authority to award punitive or any other type of damages not measured
by a Party's compensatory damages. Each Party shall bear its own costs
and expenses and attorneys' fees and an equal share of the arbitrators'
and any administrative fees of arbitration. Except to the extent
necessary to confirm an award or as may be required by law, neither a
Party nor an arbitrator may disclose the existence, content, or results
of an arbitration without the prior written consent of both Parties. In
no event shall an arbitration be initiated after the date when
commencement of a legal or equitable proceeding based on the dispute,
controversy or claim would be barred by the applicable New York statute
of limitations. As used in this Section 9.6, the term "Excluded Claim"
shall mean a dispute, controversy or claim that concerns (a) the
validity or infringement of a patent, trademark
30
or copyright; or (b) any antitrust, anti-monopoly or competition law or
regulation, whether or not statutory.
9.7. ENTIRE AGREEMENT. The Agreement contains the entire understanding of
the Parties with respect to the subject matter hereof. All express or
implied agreements and understandings, either oral or written,
heretofore made are expressly merged in and made a part of the
Agreement. The Agreement may be amended, or any term hereof modified,
only by a written instrument duly executed by both Parties hereto.
9.8. HEADINGS. The captions to the several Articles and Sections hereof are
not a part of the Agreement, but are merely guides or labels to assist
in locating and reading the several Articles and Sections hereof.
9.9. INDEPENDENT CONTRACTORS. It is expressly agreed that NITROMED and MERCK
shall be independent contractors and that the relationship between the
two Parties shall not constitute a partnership, joint venture or
agency. Neither NITROMED nor MERCK shall have the authority to make any
statements, representations or commitments of any kind, or to take any
action, which shall be binding on the other, without the prior consent
of the other Party.
9.10. WAIVER. The waiver by either Party hereto of any right hereunder or the
failure to perform or of a breach by the other Party shall not be
deemed a waiver of any other right hereunder or of any other breach or
failure by said other Party whether of a similar nature or otherwise.
9.11. COUNTERPARTS. The Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.12. WAIVER OF RULE OF CONSTRUCTION. Each Party has had the opportunity to
consult with counsel in connection with the review, drafting and
negotiation of this Agreement. Accordingly, the rule of construction
that any ambiguity in this Agreement shall be construed against the
drafting Party shall not apply.
9.13 ENGLISH LANGUAGE. The parties hereto confirm that it is their wish that
this Agreement as well as all other documents relating hereto,
including notices, have been and shall be drawn up in the English
language only. Les parties aux presentes confirment leur volonte que
cette convention de meme que tous les documents, y compris tout avis,
s'y rattachant, soient rediges en langue anglaise seulement.
31
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
MERCK FROSST CANADA & CO. NITROMED, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- -----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President Title: CEO
Date: 12/12/02 Date: 12/11/02
-------- --------
Merck & Co., Inc. a corporation organized under the laws of the State of New
Jersey hereby guarantees the performance of all the foregoing obligations of its
subsidiary, Merck Frosst Canada & Co.
MERCK & CO., INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
Date: 12/12/02
--------
32
ATTACHMENT 1.36
PATENT RIGHTS
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ATTACHMENT 2.1
RESEARCH PROGRAM
Merck is interested in determining the viability of developing therapies which
will [**]. [**]. The proposed collaboration would [**]. Merck would bring to the
collaboration [**] NitroMed would bring its [**]
In general, Merck will perform the following components of the workplan:
1. [**]
2. [**]
3. [**]
4. [**]
5. [**]
In general, NitroMed will perform the following components of the workplan:
1. [**]
2. [**]
3. [**]
A. COMPOUND DISCOVERY AND INITIAL CHARACTERIZATION
Merck will [**]. Initially, these efforts will [**] as outlined in the Merck
NitroMed agreement. [**] to support this effort are as follows:
1. [**]
2. [**]
3. [**]
4. [**]
5. [**]
6. [**]
SPECIFIC ASSAY DETAILS:
[**] (MERCK)
[**]
[**] (MERCK)
[**]
From time to time, the collaboration may merit NitroMed performing the two
above mentioned assays. In these cases, the specific assay details are:
[**] (NITROMED)
[**] (NITROMED)
[**]
B. [**] (MERCK)
Merck considers it essential to [**]. This is particularly important in the
[**], Merck plans to [**]. Merck would like to [**], Merck hopes to [**]
described above. From this information, [**].
C. [**] INTEREST
[**], performed predominantly by NitroMed. These include the following:
Merck
1. [**]
2. [**]
3. [**]
4. [**]
5. [**]
NitroMed
1. [**]
2. [**]
3. [**]
4. [**]
5. [**]
6. [**]
SPECIFIC ASSAY DETAILS:
[**] (MERCK)
Compounds are [**]. The use of [**].
[**].
[**] (MERCK)
[**] for the study of [**]. To study the [**].[**] according to the
manufacturer's instructions.
[**]) according to the manufacturer's instructions.
[**] (MERCK)
[**].
[**] (NITROMED)
[**]
[**] (NITROMED)
[**]
[**].
[**] (NITROMED)
[**].
[**] (NITROMED)
[**].
[**] (NITROMED)
[**].[**]
[**] (NITROMED)
[**] (NITROMED)
[**].
[**] (NITROMED)
[**].
D. NITROMED FTE ASSIGNMENTS
In the first year of the agreement, [**]FTEs will be assigned by NitroMed and
supported by Merck. Their approximate allocation to the above mentioned
experiments will be as follows:
[**]:
A total of [**]FTE's dedicated to evaluating selected compounds from
Merck in the following models
2
1. [**]
2. [**]
3. [**]
4. [**]
5. [**]
6. [**]
7. [**]
[**]:
A total of [**] FTE's dedicated to evaluating selected compounds from
Merck in the following models:
1. [**]
2. [**]
3. [**]
3
ATTACHMENT 5.4.7
[**] PATENTS
========================== =========== ================================================ =====================
PATENT/ DATE FILED TITLE STATUS
APPLICATION NUMBER
-------------------------- ----------- ------------------------------------------------ =====================
[**] [**] [**] [**]
-------------------------- ----------- ------------------------------------------------ ---------------------
[**] [**] [**] [**]
-------------------------- ----------- ------------------------------------------------ ---------------------
[**] [**] [**] [**]
-------------------------- ----------- ------------------------------------------------ ---------------------
[**] [**] [**] [**]
-------------------------- ----------- ------------------------------------------------ ---------------------
[**] [**] [**] [**]
-------------------------- ----------- ------------------------------------------------ ---------------------
[**] [**] [**] [**]
-------------------------- ----------- ------------------------------------------------ ---------------------
[**] [**] [**] [**]
-------------------------- ----------- ------------------------------------------------ ---------------------
[**] [**] [**] [**]
-------------------------- ----------- ------------------------------------------------ ---------------------
[**] [**] [**] [**]
-------------------------- ----------- ------------------------------------------------ ---------------------
[**] [**] [**] [**]
========================== =========== ================================================ =====================
and any extensions (including Supplementary Protection Certificates),
divisionals, reissues and continuations of any of the above patents or
applications for patent, including any foreign counterparts derived therefrom,
equivalent thereto or claiming priority thereof, as well as any European
national patents entered from patents granted in the European Patent Office and
National Phase filings entered from applications filed under the Patent
Cooperation Treaty.
4